What was once a rumor is now confirmed, with Verizon announcing today that it will acquire Yahoo‘s core internet business for $4.83 billion. We heard the two companies were closing in on deal last week, as Verizon was said to be in one-to-one talks with the internet company. Not only does this acquisition put Verizon in a position where it can compete with Google and Facebook on the mobile advertising side of things, but after last year’s purchase of AOL, it also makes Verizon quite the presence in the online media world.
Indeed, one of the first things Verizon points out in its announcement of the agreement is that buying Yahoo’s core business will bring in a user-base that numbers near one billion people, with 600 million of those users accessing Yahoo’s sites and seeing Yahoo’s ads through mobile devices. Both companies expect the acquisition to be finalized sometime in Q1 2017, though before that can happen, Yahoo’s shareholders and the regulatory powers that be need to approve of it.
Verizon won’t be purchasing all of the assets Yahoo at its disposal. Verizon is primarily interested in Yahoo’s internet business, saying that the company’s non-core IP and its shares in Alibaba Group Holdings and Yahoo Japan will remain the property of Yahoo, which will be renamed once the acquisition is complete. That means this acquisition will also serve as a way for Yahoo to separate its internet business from its Asian assets.
In an email that was sent to Yahoo staff after the buyout was announced, CEO Marissa Mayer said she’s planning to stay with the company once Verizon takes over, and both companies point out that Yahoo will remain independent as they work toward finalizing the deal. We’ll see what Verizon can do to put its stamp on the online media world with both Yahoo and AOL in its portfolio early next year.